We've been talking about it for weeks, and it looks like the national mainstream media is finally catching up. This headline in a recent Philadelphia Inquirer story pretty much sums up what we've been harping on: "Going FHA Back in Vogue."
Here's the first sentence of this Harold Brubaker story on the Federal Housing Administration's resurgence given the continuing subprime crisis:
As the mortgage industry goes through a wrenching retrenchment, government-backed loans for first-time homebuyers and borrowers with credit problems are coming back into favor.
Increasingly, new homeowners and shoppers and existing mortgage holders are turning to the government-backed loans of the FHA for help in securing a home or easing financial burdens. The FHA fell out of favor over the past decade as loose loan providers offered prospective homebuyers of all stripes financing without proof of income or financing restrictions. Now, the housing market and the country's economic market as a whole is suffering the consequences of widespread failure and foreclosure stemming from the subprime market.
Suddenly, the FHA is back in the spotlight.
Homeowners holding subprime mortgages and those at risk of losing their homes to default or foreclosure are turning to the FHA for help in refinancing and, perhaps, saving their homes.
Federal lawmakers are working on legislation that would overhaul and modernize the agency, making it easier to provide relief to needy homeowners. The FHA expects to refinance about 120,000 loans this year, although administration officials have said repeatedly that they could refinance twice that amount if some of the guidelines and regulations eased. An overhaul may do just that.
Among the options being discussed in Congress is eliminating or reducing the required 3% down payment, raising the size of the loans FHA can insure to as much as $417,000 from $362,790, and being able to charge insurance premiums based on a borrower's risk instead of a one-size-fits-all rate, according to the Wall Street Journal, which also recently wrote about the subprime crisis in a story titled, "How the FHA Could Help Borrowers."
We've been telling you about all of this for weeks, because we want to help borrowers, too. If you need help refinancing your current mortgage or simply have questions about what's best for you and your family, contact the lending and refinance experts at Mortgage Loan Place today.